Grain Snippet: SA Canola Season Off to a Great Start
The South Australian 26/27 canola crop is off to a flying start with seeding nearing completion and early vigour has been excellent. Following poor starts in the previous two seasons, the first half of 2026 has been a sharp contrast. High rainfall through March and May has been supportive for an increase the area planted to canola due to strong gross margins and good crop prospects. Seeding commenced in late March in some districts which is already seeing the first signs of flowering- significantly earlier than in recent years.
ABARES released the June Crop Report which estimates the area planted to canola in SA for the 26/27 season at 260kha up 10kha on last season. With the strong early start to the season in SA, this forecast could be underestimated as growers look to take advantage of the potential economic return and agronomic benefits that canola can provide. SA canola production is forecast at 533kMT for 26/27 which is a slight decrease of 17kMT on last season, as ABARES has used trend yields in the forecast. Although long range weather forecasts are predicting below average Spring rainfall, stored soil moisture will assist crop performance during this period.
ABARES forecast the 26/27 Australian canola crop production at 6.2MMT which is down 1.5MMT on the previous season. This is primarily due to a reduction in area in NSW of around 300kha due to the very late break and low subsoil moisture levels through Norther NSW at the time the forecast was collated. A slight increase in the area in SA (10kha) and WA up 75kha to 2.03Mha is inadequate to offset the large reduction in NSW.
Prices for non-GM canola in SA have been trending sideways through May ranging from $780/Mt to $806/MT on an Outer Harbor basis. Basis to EU rapeseed futures has declined slightly in late May; recent rainfall through NSW has improved the state’s crop prospects but has subsequently eroded the modest drought premium that was embedded in the market. Australia is forecast to crush around 1.5MMT of canola this year with most of this being conducted through the eastern seaboard.
A large percentage of SA and Australian canola is exported globally, with non-GM canola predominately to the EU for biofuel production. Global oilseed prices including EU rapeseed, Canadian canola and US soybean prices have been trending higher following the commencement of the blocking of the Strait of Hormuz. Soaring crude oil prices have lifted diesel and other fuel prices with biofuel prices following crude oil higher. Crush margins have been highly profitable for crushers particularly in the US, which has also been spurred on by changes to biofuel incentives. Canada exports a large proportion of processed canola oil to the US and Canada is set to expand its domestic crush capacity by around 2MMT adding to demand and reducing exportable supply of canola seed for markets such as China. This offers some ongoing prospects for future Aussie GM canola exports to China via improved market share.
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